How Healthy Are the Markets... Really?

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Nov. 13 (Bloomberg) -- Janney Montgomery Scott Chief Investment Officer Mark Luschini discusses the markets on Bloomberg Television's "Street Smart." (Source: Bloomberg)

You say stocks are trading above their averages.

It looks like we have a healthy market.

Are we in for a reality check?

I think we do have a healthy market.

I think it did get a little overbought.

I think we have seen a move that is a little bit too far, too fast.

We need some validation which does not help earnings growth, which has driven about 65% of the game.

I am encouraged longer-term, once we get past this short-term phenomenon.

What we need to see is a resetting of expectations to how prices can continue to go higher in the absence of faster earnings growth.

Where should investors go?

Domestically, certainly, we prefer the sectors that have after valuations.

Areas like technology, industrials, financials, and energy for that matter are more attractive than conventional sectors.

Why energy, with oil trading run $93? i think longer-term we still believe that with over 55% of global demand from energy coming from the emerging market countries that have a insatiable appetite, you have almost an inelastic demand going forward.

I think that supports not only the big major integrators, but to seek reserve replacement.

In other words, as price goes down, there is a sheer volume of demand.

We think so.

Write your in the united states as well.

You pointed out some industry sectors as well where we have seen companies get to their averages being above the 50 day average.

Is there still value in industrials and financials?

We think so.

We know in the first 4.5 months of this year, those companies that have long characteristics had a yield advantage.

The staples do real well.

Then you had this rotation and the most -- more cyclical sectors.

A reverse of what we had over the better part of the summer.

We think that is like an internal correction taking place that once again has investors growing increasingly confident that economic conditions are showing signs of life here in the u.s. that will once again be a more rewarding experience.

You just gave me an idea for a little insight and action tomorrow.

I will have to look at the leading economic indicators and see with that tells us about industrials.

Tune in.

Coming up, you might be a distressed debt investor and not

This text has been automatically generated. It may not be 100% accurate.

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